“[There is a] position called a death benefit guardian. Under the terms of the deed, the member appoints this death benefit guardian either under the terms of their will or through a separate document,” she said.

“However, you have to follow the terms of your trust deed to get this appointment right. After the death of a member, the death benefit guardian has the power to direct how that benefit is paid, or the death benefit decision made by the trustee must be consented to by the guardian.”

Mitchell added the guardian is not necessarily going to be the fund's trustee and is different to the person nominated as the LPR which must be fulfilled under the Superannuation Industry (Supervision) Act for the fund to remain compliant.

“However, a guardian allows for someone else to be involved in the death benefit decision. It's not solely at the trustee’s discretion, and because this is a beast of the trust deed, it's perfectly allowed under trust law and SIS regulations as well,” she said.

“For example, you've got mum and dad who bought their children in to create a four-member fund, or a six-member fund if the children bring in their spouses. If one of the parents dies, the surviving spouse no longer has the death benefit payment decision, because there's at least three other members in the fund and the surviving spouse could be outvoted.”

Mitchell said a solution to this is if the parents make each other a death benefit guardian so it doesn't matter what the children may want to do, as the surviving spouse will be deciding the other’s death benefit payments.

“You have to have a deed that allows you to have these kinds of provisions added,” she said.

“A lot of challenges to death benefit payments are now coming from adult children. It’s hard for them to challenge an estate because they have to prove some sort of financial need or need for provision, so if they can attack the super fund, it's almost an easy option for them to try and bolster their claim.”